Ryanair Launches Legal Action Against Swedish Airline Aid

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On Friday last week, Ryanair asked EU judges to cancel the Commission’s approval of a Swedish €455 million ($494 million) loan guarantee for airlines. This move could potentially slow down European governments’ efforts in providing relief to their struggling national carriers.

Ryanair takes EU to court
On Friday last week, Ryanair sued the European Commission to topple a Swedish bailout for airlines. Photo: Getty Images

Making good on threats

Last week, Michael O’Leary made good on his threats to take the EU to court over airline bailouts. On the 1st of May, Ryanair filed a case with the European Union’s general court, claiming that Sweden had violated EU law on state aid. The issue was that it would only grant guarantees for funds to airlines that held a Swedish commercial aviation license on the 1st of January this year.

This effectively shuts out all carriers flying to Sweden but with a base elsewhere. Not surprisingly, this includes the Irish low-cost carrier. This is only the first in a long list of potential lawsuits targeting European governments’ airline relief efforts. The Ryanair CEO wants the conditions for the bailouts to be altered so that Ryanair could also get a share of packages.

The Commission has said it will defend its decisions in court. Simple Flying has reached out to Ryanair for a comment but was yet to receive a reply at the time of publication.

Ryanair, Corporate Jet, Boeing 737
Ryanair claims Sweden’s bailout conditions are discriminatory. Photo: Tom Boon – Simple Flying

Role of pan-European airlines ignored

In a statement shared with Bloomberg, Ryanair said that Sweden’s program discriminates against airlines based outside the country, ignoring “the role of such pan-European airlines in the connectivity” of EU countries that didn’t issue their operating license.

Furthermore, the airline is criticizing the European Commission itself for failing to do its duty as a supervisor of state subsidies and to investigate the program properly.

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The Commission approved the Swedish state aid scheme for €455 million of airline support on the 11th of April. €137 million ($149 million) in revolving credit facilities specifically for struggling Scandinavian multi-flag-carrier SAS was endorsed on the 24th.

The Swedish government owns nearly 14.82% of SAS, and the Danish government 14.24%. Ryanair has expressed similar objections to French and Danish aid as it did with the Swedish program but is yet to take it any further than disapproving statements.

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SAS 737
Michael O’Leary is upset with the preferential treatment of flag-carriers. Photo: SAS

Not the most successful history

Perhaps the airline will launch further lawsuits before long, or it could wait and see how this one will go. The Irish low-cost carrier does not have the most successful of histories when taking on EU regulations.

In August last year, the EU ruled that Ryanair had to return €8.5 million ($9.2 million) to France after a marketing agreement with Montpellier airport was deemed illegal. And, back in 2007, the Commission blocked Ryanair’s bid to take over compatriot airline Aer Lingus, causing O’Leary to state that the EU regulatory body was biased against his company.

Simple Flying will most definitely be following the proceedings closely. As for O’Leary’s reputation as an industry trouble maker, well, this will surely do nothing to appease it.

What do you think of Ryanair’s lawsuit? Will anything come of it? Let us know your thoughts in the comment section. 

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